The Value of Third-Party Certification ofPreconditioning Claims at Iowa Feeder Cattle Auctions

After controlling a variety of feeder cattle characteristics and market and sale conditions, weestimate the price premiums for preconditioning (vaccinations and minimum 30 days weaning)claims with and without third-party certification (TPC) as $6.15/cwt and $3.40/cwt, respectively,in Iowa feeder cattle auctions. These premiums differ statistically (p-value less than 0.0001) andtheir difference exceeds the additional participation cost of TPC ($1/cwt) on average. Thisindicates that the third party certification is valued in the market to credibly signalpreconditioning investment under asymmetric information.[...]

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Year of publication:	2006-09-01
Authors:	Bulut, Harun ; Lawrence, John D.
Institutions:	Iowa State University of Science and Technology <Ames, Iowa> / Department of Economics
Subject:	Asymmetrische Information \| asmmetric informatin \| Signaling

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Extent:	140288 bytes 28 p. application/pdf
Series:	IOWA State University - Department of Economics - Working Papers Working Paper # 06031
Type of publication:	Book / Working Paper
Language:	English
Classification:	C23 - Models with Panel Data ; Q11 - Aggregate Supply and Demand Analysis; Prices ; Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets ; Q13 - Agricultural Markets and Marketing; Cooperatives; Agribusiness ; Specific management methods ; Study of commerce ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10009360846